Thursday, December 08, 2005

New York businessman Adam Kidan is expected to plead guilty next week to federal conspiracy and wire fraud charges in connection with the purchase of the SunCruz gambling fleet from entrepreneur Konstantinos "Gus" Boulis, according to sources close to the case.

If the deal goes through, Kidan, who was looking at up to 30 years in prison, could now face a maximum of 10 years. That sentence could be reduced depending upon the extent of his cooperation as a witness, not only against his co-defendant -- embattled super lobbyist Jack Abramoff -- but also in the prosecution of three men charged in the Feb. 6, 2001, slaying of Boulis, the sources said.

[Blocked Ads] [Blocked Ads] Lawyers for Kidan and prosecutors are finalizing the deal in which Kidan would plead guilty to one count each of conspiracy and wire fraud, sources said. A "change of plea" hearing has been set for Dec. 15 in Miami before U.S. District Court Judge Paul Huck, according to the judge's clerk.

In August, Kidan and Abramoff were named in a six-count federal indictment charging conspiracy and wire and mail fraud in connection with the purchase of the 11 gambling ships, a corporate jet and other assets from SunCruz and Greek-born owner, business tycoon Boulis.

Boulis, who made his fortune in fast-food restaurants and SunCruz, initially was a willing partner in the scheme, according to the indictment.

But events quickly spun out of control, and less than six months after the plan was thrust into action, Boulis was shot in an ambush-style murder.

Kidan's attorney, Joseph Conway, said Wednesday that he had no comment. Abramoff's attorney, Neal Sonnett, said, "I hadn't heard that" when asked Wednesday about Kidan's intended plea. Sonnett said he wouldn't comment until he received official notification. Abramoff has pleaded not guilty to the charges.

Under the plea deal, Kidan would testify against Abramoff, his longtime friend and mentor. Abramoff is also at the center of several Justice Department investigations alleging improper donations and gifts being accepted by members of Congress.

The loan fraud case can be traced to 1999 when the government forced Boulis to sell his controversial SunCruz gambling fleet by using an obscure shipping law prohibiting non-U.S. citizens from owning maritime interests. One of Boulis' lawyers put him in touch with Abramoff to help find potential buyers. Abramoff met Kidan years earlier through a young Republicans club in Washington, D.C., while Kidan was a college undergraduate and Abramoff a law school student. Liking what he saw in the SunCruz deal, he asked Kidan if he wanted to become a partner.

Prosecutors maintain that neither man had the financial wherewithal needed to buy SunCruz, especially Kidan, who was close to being broke, sources said. But authorities said that didn't stop them from diving into negotiations in January 2000. In Boulis, they found a man willing to go along with the agenda, if it meant he could secretly keep part of SunCruz, prosecutors contend.

Six months later, a company Kidan and Abramoff formed struck a deal to buy SunCruz for $147.5 million. The funding they obtained through Foothill Capital Corp. and Citadel Equity Fund required that they pay, and show proof they paid, $23 million of their own money to Boulis at the closing.

The paperwork for the loan also stipulated that Abramoff and Kidan provide accurate personal financial statements, the indictment states. But since neither had enough money to qualify for the financing, they obtained short-term loans. In exchange, those lenders received a cut of SunCruz.

In September 2000, a "Loan and Security Agreement" between Kidan, Abramoff and Boulis was sent to the financial firms, attesting that they paid Boulis the $23 million. But, prosecutors allege, no funds changed hands. Instead, Boulis had a deal with Kidan and Abramoff in which they promised to pay him most of the money and he would still retain a share of SunCruz through a shell company.

Soon after receiving the loan agreement, Foothill and Citadel released $60 million to Kidan and Abramoff's company. But Boulis maintained that he never saw a penny and the relationship with Kidan, who took over the day-to-day operations of SunCruz, quickly soured. Lawsuits and counter-lawsuits were filed and threats were reportedly made.

By November 2000, Kidan had contacted an old friend, Anthony "Big Tony" Moscatiello. Moscatiello had signed a contract with SunCruz to be a "catering consultant" at $25,000 a month, according to court records. Kidan said he thought Boulis was going to kill him, according to statements Moscatiello gave police. Moscatiello, a known associate of the late crime boss John Gotti, promised to smooth things over.

Moscatiello put Kidan in touch with Anthony "Little Tony" Ferrari, who ran "Moon Over Miami Beach," a company that, among other things, is described in records as a security firm. One of the men who worked for Ferrari was James "Pudgy" Fiorillo. In September, Moscatiello, Ferrari and Fiorillo were indicted in Boulis' murder. Kidan has not been charged in the case.

After being arrested, Moscatiello told detectives that Fiorillo traveled to his Queens home two weeks after the murder and confided that Kidan reportedly told Ferrari to kill Boulis, according to court records. Moscatiello said Fiorillo also indicated that he and Ferrari carried out the hit, the documents show. Moscatiello told detectives, "I told Adam what had happened, what I was told and he told me he never made no phone call and after Tony Ferrari told me it was a lie, I never discussed it anymore with Adam."

The Marianas Variety Online reports that Governor-elect Benigno R. Fitial says he will cooperate with federal authorities in the ongoing investigation of Rep. Tom Delay and former Washington lobbyist Jack Abramoff, whom he once described as his ?close friends.?

House leadership spokesman Charles P. Reyes Jr. said Speaker Fitial ?will comply with all the legal requirements asked of him.?

But Reyes said it?s unfair that Fitial?s name is always being associated with Delay, R-Texas, and Abramoff. In April, when news about DeLay?s and Abramoff?s possible ethical violations broke, Fitial issued a statement in their defense.

?I join Congressman DeLay in condemning this unfair criticism, which has even gone to the extent of attacking the Northern Marianas for its efforts to rightfully defend itself against hostile federal takeover attempts orchestrated by partisan political groups and other liberal special interest groups,? said Fitial in a statement issued on April 20, according to the Marianas Variety Online.

Back then, Fitial said certain left-leaning parties hostile to the local garment industry are ?attempting to undermine? his 2005 gubernatorial bid by linking him to the controversy surrounding DeLay and Abramoff, whom Fitial credited as the individuals who ?successfully thwarted repeated federal takeover attempts against the CNMI.?

The Marianas Variety Online reports that supporters of Fitial?s Republican opponent in the election, Gov. Juan N. Babauta, tried to make an issue out of the speaker?s links with DeLay and Abramoff, but it never caught on.

According to the Associated Press, DeLay and two GOP fundraisers, John Colyandro and Jim Ellis, are accused of illegally funneling $190,000 in corporate donations to 2002 Republican candidates for the Texas Legislature.

Under Texas law, corporate money cannot be directly used for political campaigns, but it can be used for administrative purposes.

On Monday a Texas judge threw out a conspiracy charge against DeLay but allowed money laundering charges to stand.

In a separate news article, the AP reported that the 2001 donations to Burns, a Montana Republican, included money directly from Abramoff and Northern Marianas garment magnate Willie Tan?s company, Tan Holdings Corp.

In that same article, Eloy Inos, a corporate executive of Tan Holdings, was mentioned as donating $5,000 to Burns? political action committee. Inos now serves on Fitial?s transition committee.

Fitial, a former executive of Tan?s, became speaker of the 12th Legislature largely through the help of DeLay?s aides. But Reyes said if Fitial was given help it was ?not surprising? since at that time he was still with the local GOP.

The Marianas Variety Online reports that, in a separate interview, Press Secretary Peter Callaghan said the CNMI Attorney General?s Office has provided federal authorities with all the documents they needed regarding the CNMI?s previous transactions with Abramoff.

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